BOSTON-New research shows wireless operators across the globe are suffering declines in profits, with global margins falling below 40 percent for the first time in eight quarters. The numbers come as subscriber volumes continue to rise.
According to research and consulting firm Strategy Analytics, subscriber volumes rose by 24 percent, but year-on-year earnings before interest, taxes, deprecation and amortization was up just 4 percent. The firm said the average margins per user declined 15 percent to $11.54 in the fourth quarter of last year. Strategy Analytics said the biggest drops were in Central and Eastern Europe and Asia-Pacific.
“The influx of new customers in emerging markets, like Russia, the Ukraine and China, has brought many benefits both to the users and operators in those markets,” said Sara Harris, Strategy Analytics’ senior industry analyst. “However, growth like this always comes at a cost-15 to 20 percent declines in AMPUs for the Chinese operators and significantly deeper cuts in Russia and the Ukraine.”
The firm said such declines are not exclusive to bigger markets. AMPU dropped by 3 percent in North America and Western Europe.
